The Home Appraisal Company, Inc. has answers to "Frequently Asked Questions"


	The Home Appraisal Company, Inc. is always eager to handle any questions you might have about appraisals or real estate in Nassau County. Feel free to contact us today.

What is an appraisal?
What does an appraiser do?
What are the reasons someone would require services from The Home Appraisal Company, Inc.?
What is the difference between an appraisal and a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
Once the assignment has been delivered, how can I have certainty that the value conclusion is trustworthy?
How are appraisers certified?
Who employs appraisers?
Where does an appraiser get the information used to estimate values in Nassau County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
Define "Market Value"
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?

What is an appraisal? (Go to list of questions)

The process of creating an appraisal deals with an evaluation which forms an opinion of value. The real estate appraiser will use a number of "approaches," typically three, to draw up the estimation of market value. One of the processes is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. Another of the methods is the Sales Comparison Approach - which involves discovering a comparison to other similar properties within a close vicinity which have recently sold. Being the most commonly used approach, the Sales Comparison Approach is generally the most accurate and best indicator of market value for a residential property. The third approach is the Income Approach, which is the best method in appraising income producing properties - it deals with estimating what an investor would pay based on the money produced by the property.

What does an appraiser do? (Go to list of questions)

An appraiser offers a professional, unbiased determination of market value, often in the context of a real estate exchange. Appraisers exhibit their expert conclusions in appraisal reports.

What are the reasons someone would require services from The Home Appraisal Company, Inc.? (Go to list of questions)

There are many reasons to order an appraisal from The Home Appraisal Company, Inc. with the usual reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal include:

To obtain a loan.
To reduce your property taxes.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To contest inflated property taxes.
If you need to settle an estate.
To offer you a leg-up when purchasing real estate.
To figure out the most probable price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Because an official agency such as the IRS requires it.
It's possible you could be involved in a lawsuit - an appraisal will help.

For a more extensive explanation of the appraisal process click here.

What is the difference between an appraisal and a home inspection? (Go to list of questions)

Home inspectors do not come to an opinion of value and do not do appraisal reports. A third-party home inspector will inspect the structure of the home, from the top to the bottom. The stereotypical property inspector's report will contain an evaluation of the integrity of the house's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

My agent performed a CMA for me. Is that the same as an appraisal? (Go to list of questions)

To be honest, they have nothing in common. The CMA utilizes market trends to create most of their business. Appraisals use similar sales which are verifiable resources. The appraisal report will also include area and construction values. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the largest differentiator is who's creating the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat fee for work they perform, regardless of their value conclusion.

What's in an appraisal report? (Go to list of questions)

Every report must reflect a credible value opinion and should clearly state the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
The intended use of the report.
The appraisal's purpose.
The type of value contained and a definition of that value.
The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible items.
All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work used while working up the appraisal.

For a more detailed view of all that goes into an appraisal report click here: Sample Appraisal Report

Once the assignment has been delivered, how can I have certainty that the value conclusion is trustworthy? (Go to list of questions)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:

That the information analysis contained in the appraisal was proper.

That significant errors of omission or commission were not committed individually or collectively.

That appraisal services were not carried out in a careless or negligent fashion.

The final appraisal report was transparent, credible and not easily discredited.

To become a state licensed appraiser, we must satisfy extensive education and experience requirements that prepare us to formulate an unbiased opinion. Likewise, appraisers must follow a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The rules for working up an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions) Regulations regarding licensing and certification are different from state to state. However, licensing and certification is most often associated with many hours of coursework, tests and experience working under a supervisory appraiser. Once licensed, he or she is required to take continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who employs appraisers? (Go to list of questions)

Most of the time, appraisers are hired by mortgage lenders to estimate the value of a house involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the information used to estimate values in Nassau County or other areas? (Go to list of questions)

One of the most important activities of an appraiser is to collect property data. Data can be divided into Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser while on site.

General data is collected from a numerous places. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. To verify actual sales prices, we look at items in the assessor's office and other public documents. Appraisers routinely have to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And last but not least, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

How can a licensed appraiser help me? (Go to list of questions)

An appraisal is a worthwhile whenever your home's value is pertinent to some financial decision. For those selling a home, you'll want to determine the price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

What exactly is PMI and how can I get rid of it? (Go to list of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. It guards the lender in the event a borrower is unable to pay on the loan and the market price of the property is lower than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Did you have less than 20% to put down on your mortgage? Call The Home Appraisal Company, Inc. today at 516-739-8080. You may be able to save money by removing your Private Mortgage Insurance premium.

Should I do anything in advance of the appraisal inspection (Go to list of questions)

The first step in most appraisals is the property inspection. During this process, we will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. Inside, pick up any clutter and make sure we can get to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of outside walls.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

Information on the latest purchase of the property in the last three years.
A list of any personal property that is part of the home and you intend to be sold with the home, such as an oven, or a washer and dryer, if applicable.
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
Brag sheet that lists major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
A list of "suggested" improvements when the property is being appraised "as complete".

Define "Market Value" (Go to list of questions)

In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:

"The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."

Who actually owns the appraisal report? (Go to list of questions)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is certainly entitled to a copy of the report - it's usually included with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner hires an appraiser directly. In these cases, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can use the appraisal for any purpose.

I want to get more for my house. Where should I spend money renovating? (Go to list of questions)

A home's location - what city it is in and even what part of that city - is key to this popular question. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

No matter where you go, however, renovating a kitchen is almost always a safe investment. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms are right up there with kitchens, returning 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.